Posted in Blog  
  on Sep 15, 2014

How To Buy Rental Property

One of the most lucrative investments that one can make today is a rental property. When properly managed, rental properties can be a long-term moneymaker that will eventually pay for itself. It's a great way to build a portfolio if you're trying to create your own organization. Even if you're just someone looking for extra cash, rental properties can provide what is needed. To get this, however, you'll need to know how to buy rental property.

The easiest and most common method is to directly purchase the property. It's a standard transaction, may sometimes involve a mortgage, but typically requires at least some form of a down payment since it will be used for commercial purposes. That's right – if you make money from a property, it becomes a commercial transaction.



#1. Use Your 401k to Purchase Properties


Did you know that a self-directed 401k or IRA can be used to purchase real estate? Rental properties that are incorporated into your investments aren't typically going to be managed by you, but it is a way to start investing now without affecting you liquid cash capitals. In return, you could end up creating quite the little nest egg for yourself when it is time to step out of your career.

#2. Raise Capital


If you're planning on purchasing a number of rental properties to turn them into a money making machine, then you might be able to raise some capital before the purchases to make this happen. You can get this from investors and even crowd-funding could be an option in certain situations. In return, you'll likely have to pay a percentage of your revenues to your investors. It can cut into your profits, but raising capital can help low cash reserve businesses and individuals get into a solid rental property without much hassle.

#3. Become a Property Manager


Maybe you want to get involved with rental properties, but you just don't have the cash to make that happen right now. If you have property management credentials, then you can take a paid commission off of the rental property in return for managing it for the investors who make the actual purchase. The downside of this method is that you don't actually have the tangible asset in your possession, but the good news is that you'll at least have a paycheck.



#4. Look for Foreclosures


Thanks to the Great Recession, there are always a number of foreclosures and empty homes that are available in every community. Many of these properties are considered abandoned and a bank simply wants to make back as much money as they can on it. This is a great way to get a good price and fair terms for a property and in return, you'll just need to do a few extra repairs.

There are also government foreclosures that are available in some communities as well. Properties that are run down will have up to a 50% allowance for repairs to be completed so that a property can be retrofitted, which means a $70k rental property might only cost you $35k overall.

Rental properties are a great investment. Use these options to get involved today.

Related

The Landlord Tenant Board: What it is and When it is Needed

Many times, there are issues between a landlord and a tenant that need to be resolved but are failed to do so, because both parties have gone too far with their actions, and have retaliated in the... More


How to Create a Residential Lease Agreement

Where there is a landlord, there will also be a tenant, and it is no surprise that these two parties can only work together once there is some sort of agreement, contract or a binding deal in place.... More


The Best Sites for Rental and Lease Agreement Templates

Many landlords find it difficult to write and draft a lease agreement. Since every State has its own general template, it can also be difficult to make sure your lease agreement meets all the criteria... More


The Best Landlord Associations for Landlords to Join

If you’re a landlord and want to manage your business in a better way, you should endeavor to get in touch with those industry experts who have the experience and the skills to help you do it. This is... More


Unpaid Rent

When you talk about the most common disputes arising between landlords and tenants, nonpayment of rent has to be there in the list. People rent their properties to earn money, and when a tenant... More


Section 8 Landlord Pros and Cons

If you have ever rented a living space and have had to move many times, you’d already know how difficult it is to find decent, affordable and secure living premises. A person has to deal with the same... More


Landlord Inspection Checklist: Rights, Letters, and Reports

Landlords across the state have the prime responsibility to make sure they inspect and up keep their property once they have rented it to the tenants. Inspections can occur monthly or yearly depending... More


Landlord Maintenance Costs and Responsibilities

Everyone knows that a landlord’s job is not easy. These folks have specific duties and responsibilities that they must perform in order to be fair. Being a landlord is not a position but it is, in... More


When to Withhold Tenant Security Deposit

Asking for a security deposit is quite common in property dealings. The reason to ask for a security deposit is to have something that would help a property owner recover some of their financial... More


How to Report Bad Tenants

Bad tenants are the worst-case scenario for any landlord; no one wants them, and if someone has them, they want them out in any way possible. There are times when landlords try as much as they can to... More